This Week in Logistics News (November 17-21, 2014)

I’m guessing it’s summer. My father stands barechested in front of me, but he’s still wearing his work pants, and he looks a bit sweaty, his hair (what’s left of it) is slicked back, and he’s all animated about something. “I told your cousin to gather that wood piled out back and bring it to the scrap yard so he could get some money for it, but he didn’t do it.” I have no idea what he’s talking about, but I just look at him as he rambles on, and he looks a bit thinner to me, but stronger and more muscular, and maybe even younger, and his voice, his voice, oh his voice

and then silence, darkness, and I’m awake in bed. It’s Thursday, 5:31 a.m.

It’s cold in my bedroom (my wife insists on shutting off the heat at night), and I lie there in bed, beneath the comforter, and let the minutes pass. It had been a year, maybe longer, since the last time I had dreamt of my dad, and it was so real and vivid this time, I expected to wake up again and find that pile of wood in the backyard, and my dad in the shower, and the sun out the window setting, not rising.

I miss my father, and when he visits my dreams, it’s a happy surprise, like bumping into an old friend at the park. The visits are never long enough, and the hardest part for me, the part that tears me a little each time, is not waking up from the dream, but forgetting his voice again afterwards.

In this week’s news…

Back in June, I wrote about how mobile technologies (along with continuous optimization) are transforming home delivery, which was a topic I had discussed with Andrew Roszko, Senior Vice President at Descartes, earlier this year on the talk show. I’ve also written and spoken about the convergence of technologies in the fleet management space, namely the coming together of routing and scheduling, telematics, mobile, and business intelligence and analytics (see Fleet Management Technology Trends).

Well, the convergence continues. This past September, Omnitracs announced its acquisition of XRS Corporation, and this week Descartes announced that it has acquired Airclic for $29.7 million. Here are some details from the press release:

Airclic’s cloud-based mobile solutions help streamline and automate complex ‘last mile’ logistics processes. The ‘last mile’ is a key piece of the supply chain that directly touches customers and has traditionally been fraught with manual paper-based processes. Airclic’s Perform platform provides configurable, feature-rich mobile technology and advanced electronic proof of delivery (POD) solutions that operate on a hand-held device carried by the driver. The solutions help customers across a number of industry verticals, including third-party logistics (3PL), food and beverage, retail and healthcare, improve transportation efficiency and reduce the cost of delivering goods.

This acquisition underscores yet again the important role mobile devices and applications are playing in the fleet management space. In many cases, demand for mobile solutions is what’s driving companies to invest in fleet management applications. Relatively few companies today are just looking to implement a routing and scheduling solution; most implementations today include a mobile component too.

When Amazon acquired Kiva in March 2012, the big question was, Why? Here’s what I wrote at the time:

Why would Amazon.com acquire a materials handling company? Why not just be a customer of Kiva Systems, like Zappos.com and Diapers.com (which are owned by Amazon)?

Here is what Amazon.com said in the press release, which isn’t much, but I believe it offers a small clue: “Amazon has long used automation in its fulfillment centers, and Kiva’s technology is another way to improve productivity by bringing the products directly to employees to pick, pack and stow,” said Dave Clark, vice president, global customer fulfillment, Amazon.com. “Kiva shares our passion for invention [emphasis mine], and we look forward to supporting their continued growth.”

I believe it’s that passion for invention that drove this acquisition. Specifically, the desire to own and control the innovation cycle — from the front end of its operations (website) to its back end (order fulfillment and DC automation systems) — in a holistic and integrated manner.

In essence, Amazon is taking the same “owning the ecosystem” strategy that Apple took in the computer industry…Here is what I envision [Amazon] saying: “By bringing together our front-end and back-end systems and innovating them in a holistic and integrated manner, we’ll achieve even greater levels of productivity and profitability, and provide even better and more differentiated service to our customers.”

As reported in the Wall Street Journal yesterday, it appears that “Amazon’s robot army is finally falling into place,” with deployments at warehouses in California, Kentucky, Texas, and others. Here are some interesting details from the article:

At a 1.2-million-square-foot warehouse in Tracy, Calif., about 60 miles east of San Francisco, Amazon this summer replaced four floors of fixed shelving with the robots, the people [familiar with the matter] said.

 

Employees at some robot-equipped warehouses are expected to pick and scan at least 300 items an hour, compared with 100 under the old system, current and former workers said…If Amazon can shrink the time it takes to sort and pack goods at its roughly 80 U.S. warehouses, it can guarantee same-day or overnight delivery for more products to more customers.

 

The robots could also help Amazon save $400 million to $900 million a year in so-called fulfillment costs by reducing the number of times a product is “touched,” said Janney Capital Markets analyst Shawn Milne. He estimated the robots may pare 20% to 40% from the average $3.50-to-$3.75 cost of sorting, picking and boxing an order.

The robots keep coming — that was one of my predictions heading into 2014 (and the year before that too). When you look at what’s been happening in recent years, like Amazon testing drones to ship packages and Google buying eight robotics companies, it’s clear that the line between what humans and robots can do is becoming thinner every day. Driverless trucks on our roads and Kiva robots in the warehouse are just the beginning. Think a robot can’t do your job? Think again.

Finally, China and Asia remain hot areas of investment for third-party logistics providers, with both Menlo Logistics and DHL Supply Chain making announcements this week. Here are some highlights from their press releases:

Menlo Logistics: [The company] continues to experience significant growth in the South Asia region in 2014 and is targeting increasing its presence in Thailand and Malaysia, and adding to its portfolio supply chain services for two major new industries as key opportunities for 2015…The growth trend was supported by major investments in new state-of-the-art facilities [in Singapore, Malaysia, and Thailand]. Collectively, the three new sites added 69,000 sq. meters of warehouse space across the region, bringing the total warehouse count for Menlo in South Asia to 35, and the total space under Menlo management to 392,000 sq. meters.

DHL Supply Chain: [The company] announced it will commit a further EUR 113 million in China as its strategy gains traction. This is on the back of EUR 105 million that was committed in 2013, bringing the total committed to EUR 218 million. The funds will support the expansion of its network across China and in particular, six additional state-of-the-art logistics facilities scheduled for completion by 2020. The confirmed locations are Guangzhou, Hangzhou, Wuhan, Shenyang, Shenzhen and Shanghai Waigaoqiao Free Trade Zone.

And with that, have a happy weekend!

Song of the Week: “Waves” by Mr Probz

Note: Descartes is a Talking Logistics sponsor

 

Be Sociable, Share!

Four Ways to Secure Carrier Capacity Using Bid Optimization

Ask any trucking company how their business is going and the response you’ll likely hear is, “Great! Maybe the best it’s ever been, except we can’t find drivers.” The driver shortage, it turns out, is a backhanded sign of prosperity.

The American Trucking Associations recently estimated that the industry could fill 30,000 to 35,000 driving jobs immediately. The shortage has been intensified by a rebounding economy. Freight volumes have… Continue reading

A Case Study in Closed-Loop Operational Management

As I’ve said before, the biggest challenge facing supply chain and logistics executives today is not managing change, because that’s always been the norm in supply chain management, but managing the rapid pace of change. Customer expectations, regulations, the competitive landscape, technology — all of these things are changing so rapidly, companies having a hard time keeping up; their existing technology, talent, and decision-making processes can’t keep up with this… Continue reading

Supply Chain Convergence Making Collaboration and End-to-End Visibility a Reality

It’s been decades since the term ‘Supply Chain Management’ was coined to define the coming together of internal and external supply chain players, as well as the planning and execution teams within supply chain businesses. Early on, IT systems were launched that promised to deliver full supply chain management, and yet we are still discussing the importance of linking the end-to-end supply chain in driving efficiency and true effectiveness, with… Continue reading

The Network Effect in Supply Chain and Logistics

About four years ago, UPS launched its “We Love Logistics” ad campaign, which helped raise public awareness about the logistics industry (and helped my family and friends better understand what I do for a living). I hope UPS does the same for communicating the value of networks to supply chain and logistics executives — not just physical networks, but digital ones too.

Last week, UPS held an… Continue reading